View From The Hill: November 30, 2015

No Real Moves With No Real Data To Guide

Don’t anticipate any real moves in this market until we get beyond this week’s release of central bank policy announcements, OPEC’s bi-annual meeting and the U.S. non-farm payrolls report.

When the market doesn’t know what to do, one can usually rely on the VIX, our fear or market volatility gauge. It did not fail to disappoint as it easily outpaced all other capital markets indices in our performance table (see summary below).

In commodities, Gold bounced back from an oversold position, but the trend for the precious metal remains bearish. WTI Crude Oil was up earlier in the day, but surrendered all its gains to finish in slightly negative territory. The absence of a significant price change reflects energy investors’ caution on making any bets until after the release of the EIA’s latest report on Wednesday and the summary of OPEC’s meeting in Vienna, Austria this upcoming Thursday.

Bearish economic data weighing on the market today were the Chicago PMI for Nov-2015 (actual @ 48.7 vs. consensus @ 54.0 and prior @ 56.2) and Dallas Manufacturing Survey for Nov-2015 (actual @ -4.9% vs. consensus @ -11.0% and prior @ -12.7%). Both reports reflected economic contraction and stocks responded accordingly. With the exception of Utility stocks, all the major equity indices, which include the SP-500, Nasdaq-100, Russell-2000, Dow-30 Industrials and Dow-20 Transports, were negative.

The U.S. Pending Home Sales report for October-2015 delivered sub-par results as it increased only 0.2% (mth/mth) vs. consensus @ 1.0% and previous revised @ -1.6%. Both Dow Jones Real estate indexes, for REITs and home construction builders, declined.

Despite the bearish tone of today’s economic data, the U.S. Dollar Index resumed its ascent and this time closed above 100.00. Yet, the real news in currency markets is the admission of China’s Yuan into the IMF’s global basket of reserve currencies (just in case you missed this announcement).

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